Nonresidential construction spending fell 1.7% in April 2017, totaling $696.3 billion on a seasonally adjusted, annualized basis, according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors (ABC).
In April, private nonresidential construction spending fell 0.6% for the month, but has increased 4.3% on a year-ago basis. Public nonresidential spending decreased by 3.4% and is down 4.2 % year-over-year. Declines in nonresidential construction spending for the month were largely attributable to drops in spending in the highway and street and power segments, down $3.5 billion and $2.1 billion, respectively.
“A staggering 13 of 16 nonresidential construction segments experienced spending declines in April,” said ABC Chief Economist Anirban Basu. “While poor weather interrupted a considerable amount of economic activity in the Northeast in March—which produced March’s weak jobs report, among other things—weather generally improved in April. This would normally suggest expansion in nonresidential construction spending in on a monthly basis; however, that is not reflected in the April data.
“Instead, public nonresidential construction spending continued to demonstrate substantial weakness with one noteworthy exception, water supply, which produced a small increase,” said Basu. “Among the private categories only office, which was flat, and commercial, which sustained only a small monthly decline, reported stable spending amounts. Both categories have seen a year-over-year spending expansion of 12.4%.
“There are a number of explanatory factors,” said Basu. “First, there are survey data from the Federal Reserve indicating that bank lending to commercial real estate has begun to tighten, perhaps because of growing fears of overbuilding in certain markets. Uncertainty at the federal agency level is also likely having an impact, including in public segments like highway and street that depend heavily on federal outlays. Finally, certain economic decision-makers may have ratcheted down their projections of economic growth in 2017 and 2018, resulting in more hesitation with respect to moving forward with projects at various stages of development.”
February’s initial estimate, which was revised higher last month, was revised lower this month. The revision translates into a decline of $9.6 billion, or 1.3%. March’s value was relatively unchanged at around $708.6 billion.
Related Stories
Market Data | Apr 6, 2017
Architecture marketing: 5 tools to measure success
We’ve identified five architecture marketing tools that will help your firm evaluate if it’s on the track to more leads, higher growth, and broader brand visibility.
Market Data | Apr 3, 2017
Public nonresidential construction spending rebounds; overall spending unchanged in February
The segment totaled $701.9 billion on a seasonally adjusted annualized rate for the month, marking the seventh consecutive month in which nonresidential spending sat above the $700 billion threshold.
Market Data | Mar 29, 2017
Contractor confidence ends 2016 down but still in positive territory
Although all three diffusion indices in the survey fell by more than five points they remain well above the threshold of 50, which signals that construction activity will continue to be one of the few significant drivers of economic growth.
Market Data | Mar 24, 2017
These are the most and least innovative states for 2017
Connecticut, Virginia, and Maryland are all in the top 10 most innovative states, but none of them were able to claim the number one spot.
Market Data | Mar 22, 2017
After a strong year, construction industry anxious about Washington’s proposed policy shifts
Impacts on labor and materials costs at issue, according to latest JLL report.
Market Data | Mar 22, 2017
Architecture Billings Index rebounds into positive territory
Business conditions projected to solidify moving into the spring and summer.
Market Data | Mar 15, 2017
ABC's Construction Backlog Indicator fell to end 2016
Contractors in each segment surveyed all saw lower backlog during the fourth quarter, with firms in the heavy industrial segment experiencing the largest drop.
Market Data | Feb 28, 2017
Leopardo’s 2017 Construction Economics Report shows year-over-year construction spending increase of 4.2%
The pace of growth was slower than in 2015, however.
Market Data | Feb 23, 2017
Entering 2017, architecture billings slip modestly
Despite minor slowdown in overall billings, commercial/ industrial and institutional sectors post strongest gains in over 12 months.
Market Data | Feb 16, 2017
How does your hospital stack up? Grumman/Butkus Associates 2016 Hospital Benchmarking Survey
Report examines electricity, fossil fuel, water/sewer, and carbon footprint.